APEC vows to fend off euro woes, boost finances

Originally published September 10, 2012 at 12:00 am

Updated September 10, 2012 at 6:01 am

Pacific Rim leaders pledged Sunday to fend off the deepening damage from the European crisis and revive flagging growth in the region by supporting open trade, reforming their economies and strengthening public finances.

Pacific Rim leaders pledged Sunday to fend off the deepening damage from the European crisis and revive flagging growth in the region by supporting open trade, reforming their economies and strengthening public finances.

The 21-member Asia-Pacific Economic Cooperation forum wrapped up an annual summit in this far eastern Russian seaport Sunday, vowing to work together to support growth and restore confidence in shaken financial markets. The region accounts for about half of all world economic activity and 40 percent of world trade.

“Our work was constructive. We have specific results and I am satisfied with the outcome of the work,” Russian President Vladimir Putin said of the event, which showcased Moscow’s ambitions to expand trade and business along its long-neglected Pacific coast.

The leaders issued a statement welcoming European leaders’ promises to help stabilize the crisis-stricken euro region and warning against “excess volatility” and distortions in financial markets. The APEC leaders said they would work to reduce deficits and imbalances in their countries’ own finances.

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“The events in Europe are adversely affecting growth in the region. In such circumstances, we are resolved to work collectively to support growth and foster financial stability, and restore confidence,” the statement said.

“We remain committed to reducing imbalances by strengthening deficit economies’ public finances with sound and sustainable policies that take into account evolving economic conditions,” it said.

Despite signs that robust growth in the dynamic Asia-Pacific is being dragged down by reduced demand for the region’s exports, Putin described the attitude among his fellow leaders as one of “constrained optimism.”

The APEC region is generally not as heavily encumbered as Europe by soaring social welfare costs, Putin said.

“There is nothing like the burden that exists in Europe,” Putin said, though he acknowledged that the region faces many problems.

Given APEC’s role as a consensus led forum, the annual summit did not advance any major new policy initiatives. The leaders’ statement mostly endorsed earlier calls for freer trade, combatting corruption and allowing exchange rates to fluctuate more freely.

The leaders also called for closer cooperation on food security and avoiding potentially destabilizing surges in food prices.

Food security “is one of the most acute problems of our time,” Putin said in convening Sunday’s meeting.

Revitalizing growth through more open trade is an urgent priority for the APEC forum, whose aim is to dismantle barriers and bottlenecks that interfere with business, while nurturing closer economic ties.

The leaders also endorsed a plan to cut tariffs on environmental-related goods – such as waste-water treatment technologies – to 5 percent or less by 2015.

“By reducing tariffs on environmental goods, we will help our businesses and citizens to access important environmental technologies,” the joint statement said.

Among other initiatives the APEC leaders agreed on the need to crack down on poaching and trafficking in endangered species, to improve the reliability of supply chains that can often be disrupted by disasters and other disruptions, to enhance emergency preparedness and nurture innovation.

Russia’s hosting of the APEC summit highlights a renewed focus on developing its resource-rich Far East, where it plans to develop modern railroads, seaports and airports to help build a bridge between Asia and Europe.

During the week of APEC-related meetings, Russian companies signed several deals to support development in the region, including a memorandum on a liquefied natural gas plant to increase exports to the Asia-Pacific region and a timber processing plant.

“We are interested to see more foreign investors coming to Russia,” Igor Shuvalov, Russian first deputy prime minister responsible for economic issues, told The Associated Press. “The main task of our forum is to facilitate freer trade. This task is being fulfilled.”

Next year’s APEC summit is due to be held on the Indonesian island of Bali, and the meeting in 2014 in China.